Ayala Land Inc. over the weekend filed its application to issue a real estate investment trust (REIT) with the Securities and Exchange Commission (SEC).
The application follows the government’s release of the amended REIT implementing rules and regulation late last month, easing up some conditions for entities that intend to raise funds through the REIT.
The SEC said Ayala Land through unit AREIT Inc. intends to offer up to 478.64 million REIT shares consisting of 47.86 million primary shares, 430.78 million secondary shares and another 23.93 million additional shares to cover the greenshoe option.
At an offer price of P30.50 per share, the fund raising will raise for AREIT P1.36 billion that it will use for future investments in real estate properties in Metro Manila and other key regions in the Philippines.
Currently, the company’s portfolio consists of three commercial buildings in the central business district (CBD) of Makati City: Solaris One, Ayala North Exchange and McKinley Exchange.
The REIT Act, passed by Congress in 2009, allows REIT companies to list and trade their shares of stock in the Philippine Stock Exchange (PSE) as an alternative means to raise funds for property development and expansion initiatives.
“The REIT is a new asset class that provides investors with dividend-based income, inflation protection, and portfolio diversification. It broadens investment options for Filipinos, opening the opportunity to own a stake in high-value real estate assets in the country,” Ayala Land said.
“Ayala Land’s initiative to pioneer REITs in the Philippines reflects its confidence in the local economy. Through this initial capital market transaction, ALI hopes to pave the way for the development of a REIT market in the country, bringing another milestone to the Philippine stock market. The company seeded AREIT, Inc. with Grade A office assets located in Makati CBD and is expected to expand its portfolio with new acquisitions in the future,” it added.
Ayala Land is planning an initial public offering for AREIT after receiving regulatory approvals from the SEC and the PSE.
The SEC and the Bureau of Internal Revenue (BIR), with the approval of the Department of Finance, issued amendments to the implementing rules and regulations of the REIT Act on January 20.
Among others, the SEC lowered the minimum public ownership requirement in line with the provision of the REIT Act that a REIT must have at least 1,000 public shareholders each owning at least 50 shares of any class of shares and, in aggregate, at least 1/3 of the outstanding capital stock.
